Drugmakers Could be Forced to Disclose Drug Prices in TV Ads

Drugmakers Could be Forced to Disclose Drug Prices in TV Ads
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Fun fact: Drugmakers may legally advertise pharmaceuticals on television in only 2 countries, New Zealand and the United States. Now under new proposed rules, drugmakers may be forced to disclose in their TV ads how much their drugs cost. [1] [2]

A new federal rule has been drafted by Health and Human Services Secretary Alex Azar that would require drug manufacturers to disclose in television ads the list price for a 30-day supply of any drug that is covered through Medicare or Medicaid and costs more than $35 a month. [2]

In an October 15 speech before the National Academy of Medicine, Azar said:

“Sometimes it takes government to make the first move, to disrupt a broken system, and to lay down new rules of the road.”

Read: Merck Exec Explains Why Drug Prices are Out of Control

The draft rule will be debated throughout the fall. How much the pharmaceutical industry resists the proposed rule will likely dictate whether or not it will become a requirement.

In a shocking move, health insurers’ main trade group said it was pleased with the proposed rule, citing the need to combat “out-of-control” drug prices.

The American Medical Association (AMA) is dead-set against direct consumer advertising, but said in a statement that “as long as the practice is allowed, the ads should come with at least a small dose of transparency.”

Currently, other wealthy countries spend about half as much per person on healthcare than the U.S. spends. In fact, the U.S. ranks highest in healthcare spending among the world’s developed nations. Those in favor of the proposed rule believe it will make Americans more aware of healthcare costs and, in turn, slow the ever-rising drug prices that have contributed to the U.S.’s unfortunate top ranking. [2] [3]

Hours before Azar’s speech, the Pharmaceutical Research and Manufacturers of America (PhRMA), the major pharmaceutical lobbying group, announced a new voluntary action that would send consumers to company websites with pricing information. Beginning April 15, 2019, the websites would provide the public with a variety of pricing information, including the list price of a drug, the expected out-of-pocket costs of a drug, and any available patient assistant programs. [2]

Read: Pharma Companies Spend 19x More on Marketing than Research

Azar dismissed the action, saying it was nothing but an attempt to thwart stricter federal intervention.

The secretary compared the proposed rule to a 1950’s-era rule requiring automobile companies to disclose their cars’ sticker prices.

“Despite the ample precedent for this common-sense measure, the pharmaceutical industry has resisted it fiercely.”

Azar further said PhRMA’s announcement was “no coincidence,” and that “placing information on a website is not the same as putting it right in an ad.”

Michael Rea, founder and CEO of software company RX Savings Solutions, agreed, saying that “the impact” of PhRMA’s announcement “is zero.”[4]

He added:

“It’s not going to do anything.”

Steve Ubl, president of PhRMA, said that disclosing drug prices in TV ads would be “very confusing, misleading, lacks appropriate context, and isn’t what patients want or need.” He also signaled that if the rule becomes a requirement, it would lead to a protracted legal battle, citing First Amendment concerns.

Read: Pharma Industry Ads Seek to Draw Attention Away from Drug Costs

But Azar said: [4]

“Patients deserve to know what a given drug could cost when they’re being told about the benefits and risks it may have. They deserve to know if the drug company has pushed their prices to abusive levels. And they deserve to know this every time they see a drug advertised to them on TV.”


[1] Health System Tracker

[2] The Washington Post

[3] Investopedia

[4] USA Today